<p>Extensive damage to hill tunnels observed in recent earthquakes highlights the need for additional research on the seismic design and vulnerability of tunnels in hilly terrain. Fragility curves are an effective method for representing the vulnerability of tunnels subjected to seismic hazards. This study develops fragility curves using a performance-based approach for horseshoe-shaped tunnels located at three different positions along hill slopes in different rock mass qualities. The influence of topography was assessed by comparing hill–tunnel models with equivalent flat-terrain counterparts. An extensive series of nonlinear dynamic analyses was conducted, subjecting 12 numerical models to vertically propagating transverse seismic waves. The rock mass was modelled using the Hoek–Brown constitutive model, while the bedrock was treated as an elastic half-space material. Tunnel linings were designed according to existing guidelines and modelled as elastic materials, assuming a no-slip interface between the tunnel lining and the rock mass. Damage in the lining was quantified in terms of the ratio of bending moment demand to capacity. A multi-stripe analysis was conducted, where ground motions were selected compatible with increasing hazard levels defined by uniform hazard spectra obtained from site-specific probabilistic seismic hazard analysis. The study reveals that the presence of tunnels induced localized amplification at specific locations along the hill surface. Fragility analysis demonstrated that topography significantly influenced tunnel vulnerability, with hill tunnels exhibiting 18%–375% higher probability of extensive damage compared to flat-terrain counterparts, depending on tunnel position and rock mass quality. These findings emphasize the need to incorporate the effects of rock mass quality and tunnel location along the slope in tunnel design guidelines.</p>